Woosh - and float vanishes

Woosh is abandoning plans for a public offering, but denying that investors were scared off by doubts about its technology and competitive position.

"We've assessed recently that it's much more desirable for the company to stay private at this stage," said founder and chairman Rod Inglis.

He would not say why the company had decided against a float and would only repeat that "it's a much preferred option to stay private".

The company would "carry on exactly as we have been, with our existing business plan", he added.

Market sources believe Woosh scuttled the IPO because it was not able to get orders at its asking price, originally $1.50 to $1.70 a share. The company lowered that to $1-$1.10, but it remains unclear how much traction it got at the new price.

Investors were reluctant to get into Woosh because of questions industry observers have raised about its wireless technology. They also doubted whether the company would be able to compete with Telecom, which has already shown interest in similar technologies.

Inglis defended the technology and denied that concern about it was the reason for scrapping the IPO.

"I use it every day and have never had a problem myself," he said.

He also denied that competition with Telecom was a factor.

Woosh's main investors - including Inglis, Warehouse founder Stephen Tindall, the Todd family and Sky TV founder Craig Heatley - have put $130 million into the company so far. A float at $1.10, raising $80 million, would have valued the entire company at $151 million. That means the original investment would have been worth a maximum of $71 million after a float.

Market sources believe Inglis invested $5 million to $8 million in Woosh. Under those float conditions, his investment would have been worth $2.75 million to $4.4 million.

Looming legislation that will lower internet costs and raise speeds could be a problem for the company because it offers only an entry-level broadband product.

Chief executive Bob Smith yesterday reiterated that Woosh would offer higher-speed plans "soon".

Chief operating officer Rich Cane also played down the higher speeds - up to 7.6 megabits per second, or 130 times faster than dial-up - that competitors could soon be offering.

He said these were only theoretical, best-case-scenario speeds, whereas Woosh's broadband offering - around 250 kilobits per second, five times faster than dial-up - was an actual, sustainable speed.